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Appreciation |
When the price of a currency rises, it is said that the currency appreciates. |
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Quotation |
Also known as the bid price, the price at which a non-market maker is willing to buy a particular currency.
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asset allocation
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From the perspective of risk management, funds are dispersed in different markets to achieve diversification. |
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trade account
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The difference between a country's exports and imports. |
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bull market
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A market characterized by rising prices. |
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bear market |
A market characterized by falling prices. |
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Bid-ask spread
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The spread between buying and selling. |
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Broker
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Individuals or companies acting as intermediaries buy and sell foreign exchange in accordance with the instructions of investors. Some brokers charge a commission. |
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Cable |
Another name for the GBP/USD exchange rate. |
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central bank
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A government or quasi-government agency that manages a country's monetary policy. For example, the central bank of the United States is the Federal Reserve. |
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commission
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A transaction fee charged by a broker. |
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cross rate
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A currency pair is the ratio between two currencies that do not include the U.S. dollar, such as EUR/JPY. |
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currency in circulation
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Banknotes issued by a country's government or central bank as legal tender. |
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currency risk
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The risk of incurring losses due to adverse changes in exchange rates. |
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day trading
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A position that is opened and closed within the same trading day. |
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deficit
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The trade (or balance of payments) balance is negative. |
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Economic Indicators
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Statistics released by the government showing the current growth rate and stability of the economy.
Common indicators are: employment rate, gross domestic product (GDP), inflation rate (CPI), retail sales.
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European Central Bank
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Central Bank of the European Monetary Union. |
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the fed
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US central bank. |
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Forex/Foreign Exchange
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A market for buying and selling between currencies. |
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Fundamental analysis
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Judging financial market movements through the analysis of economic and political news. |
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futures contract
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A contract for the exchange of goods or instruments at a stated price at a future date. The main difference between futures and forward contracts is that futures are usually traded against a fixed settlement date. At the same time, forward contracts are traded over-the-counter, and the performance time can be negotiated by both parties. |
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hedging
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A position or combination of positions used to reduce the risk of a major position. |
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inflation
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An economic state in which the prices of consumer goods rise, leading to a decline in purchasing power. |
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limit order
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An order to buy at or below a specified price, or to sell at or above a specified price. |
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fluidity
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The ability of the market to accommodate large-scale transactions with little or no impact on price stability. |
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Margin
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The collateral assets that must be deposited in order to open a position. |
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Margin call
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The notice issued by the broker or dealer requires that when the exchange rate trend is opposite to the customer's operation direction, the customer must add funds or other collateral to guarantee the position. Or at this time the customer can also choose to close one or more positions. |
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market maker
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A trader who provides a quote and is ready to trade at the quoted bid or ask price. |
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OTC
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Used to describe any transaction that is not conducted on a regular trading venue. |
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resistance level
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You expect the market to sell off at this price level. |
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long position
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A market position is formed when a client buys a currency that he does not own. Usually expressed in terms of the base currency, eg: long USD (short CHF). |
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short position
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An investment position that profits from a decline in market trading prices. |
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spot price
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current market price. Spot foreign exchange transactions are usually settled within two business days. |
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open position
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In fact, it has not been liquidated, or it has not been reversed to the same size. |
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stop loss order
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A buy or sell order that can only be executed when the price reaches a certain set level. |
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stop loss
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An order to close a position when a certain price is reached in order to minimize losses. |
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support level
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You expect the market to see buying at this price level. |
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profit
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To guarantee a profit, an order to close a position when a specified price is reached. |
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technical analysis
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Analyze market data through graphics, price trends, trading volume, etc., and try to predict future market conditions |
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Convert arbitrage transactions
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A transaction between a company and an agent to buy/sell from one form of foreign currency to another on a specified settlement date. |
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arbitrage
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When the currency exchange rate changes in the international currency market, in the hope of making a profit in the transaction, the opposite transaction of buying and selling the same amount of foreign currency is carried out |
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current market rate
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The final current exchange rate for the transaction is based on the information of the currency pair on the international banking market. |
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Bid and Ask
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In foreign exchange, there are buying and selling prices called ask and bid respectively. The buying price refers to the price that the market is willing to pay for a particular currency pair. The ask price refers to the price at which the market is willing to sell.
For example, the USD/CHF quote is 1.1650/1.653, where the bid is 1.1650 and the ask is 1.1653.
Foreign exchange quotations are usually abbreviated to a smaller number of digits, such as 50/53 in this case in telephone quotations.
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point
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A pip (number of points in a price) represents the smallest unit of movement for a currency pair. For most currencies, foreign exchange quotes are rounded to four decimal places, except for USD/JPY. 1 pip represents 10,000th of its counterpart currency, or 0.0001. For example, if GBP/USD is quoted at 1.6319, then a 1 pip increase would be 1.6320. The quotation of USD/JPY only retains two decimal places (1/100 or 0.01). |
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Base Currency and Quote Currency
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In foreign exchange, each monetary instrument has two currencies. The first currency is called the base currency, and the first is called the quotation currency. It should be understood that all transactions in the system are carried out in the base currency, so the profit/ Loss and pip values are from the quote currency. In order to introduce these values into the company's currency balance, an automatic conversion is performed according to the current market exchange rate, for which there is no charge. |
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balance
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The total financial result of all completed transactions and operations with withdrawal or deposit of monetary funds from a trade account. |
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contract specification
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Basic trading conditions for each instrument (spread, minimum/maximum trade volume, steps for trade volume change, initial margin, margin for locked positions, etc.). |
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currency pair
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In the foreign exchange market, one currency is always quoted relative to other currencies. The base currency is the currency that is treated as a parameter. For example, in a EUR/USD quote, where the euro is the base currency, the quote represents how many dollars it would cost to buy 1 euro. Similarly, for USD/JPY, the dollar is the base currency and the rate represents how many yen it costs to buy 1 dollar. |
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net worth
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The current state of an account with open positions, defined according to the formula: balance + floating profit/loss. |
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floating profit/loss
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There is no fixed profit/loss due to open positions at the value of the current currency exchange rate. |
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ruling trade
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There is a ruling business, the sum of the positions exceeds the private funds (free margin) by several times, at this time, on the settlement date, according to the ruling, the sum of the current client's free margin should pay off possible losses. |
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Margin required
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For monetary protection of open positions, for each instrument it depends on credit leverage and the amount of open positions. |
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free margin
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When opening a position, the total balance of the customer's trading account re-estimated at the current exchange rate under real time conditions can be used to open a new position, and its formula is equity-margin. |
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Hedging Margin
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This is the margin required by the company for opening and maintaining positions. |
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instruction
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Rules for corporate clients to open/close positions, allocate, delete or change order levels. |
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symbolic price
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Where the list price is displayed, the company will not accept the customer's order. |
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tool
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The currency pair or contract to trade. |
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open position
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For transactions that have not been revoked or liquidated, after establishing a position, customers can: conduct equal and opposite transactions; maintain a required margin of not less than 10% of the net value. |
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Lock up
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Long positions and short positions are opened simultaneously in one account. |
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long position
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Buy the instrument, hoping it will go up, for currency pairs: buy and sell the base currency at the quoted price. |
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short position
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Sell instrument, hoping to fall, applied to currency pairs: sell the base currency at the quoted price. |
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Trading volume
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The transaction amount as the base currency. |
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Order
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Arbitrary instructions of the client in the execution of trading operations. |
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order level
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The price specified in the order. |
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price
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Information about the current instrument exchange rate in the form of Bid/Ask. |
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exchange rate
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The value of a unit of the base currency, expressed in the quote currency. |
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ask
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The company's customer quotation acquisition rules, for obtaining quotations, the request is not necessary for the customer to complete the transaction. |
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non-market quotation
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The quotation meets the following conditions: there is a large price difference; the price returns to the original level within a short time interval, and there is a price difference; there is no rapid price change before the quotation comes out; there is no macroeconomic during the quotation. Events and or community news have a great influence on the real exchange rate of an instrument. |
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swap
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The result of a conversion transaction of two opposite currencies of the same amount at different exchange rates on different settlement dates is reflected on the trading account as a balanced transaction. |
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settlement date
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The date of the settlement process and the date of the end of the business, the execution of the currency settlement business in the system is based on "spot", that is to say, on the second working day after the end of the transaction, regardless of rest days and holidays. |
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fluctuate
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It is an index display that describes market price trends or changes in income over time. |
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complete transaction
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Consists of two opposite and equal volume trading operations (opening a position and closing a position): buying and selling or selling and buying. |
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written notice
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The original and electronic copies of any documents (including fax, e-mail, domestic post where the client terminal is located, etc.). |
